Property Investments Refinancing Strategy

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Strategies
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Increase Your Property Portfolio with Red Cardinal Property Investments Refinancing Strategy

Property investment is a steady game with its low-risk profile and dual returns through capital growth and rental income making it highly attractive. However, it is also a slow game, as your money gets tied up in bank loans, limiting the number of properties you can buy at once and thus your ability to multiply your returns quickly. But what if there was a way to accelerate this process without feeling over-leveraged? At Red Cardinal Property Investment, we can help you define a refinancing strategy to increase your income and grow your portfolio more efficiently.

Why Refinancing is a Game-Changer

Refinancing is an effective and impactful strategy to grow your property portfolio. Before optimising your investment, it is crucial to have a Proven Property Game Plan. Red Cardinal’s strategy ensures that you pick the right location and project, reducing risks and securing better returns from the outset, leading to steady capital growth and rental income over the years.

Understanding Refinancing | Property

In property terms, refinancing means remortgaging. A borrower takes out a new loan to pay off the existing one, essentially replacing their debt with more favourable terms. This strategy offers several benefits, including:

  • Lower Interest Rates & Reduced Monthly Repayments: Refinancing can help you secure a lower interest rate, decreasing your monthly payments.
  • Fixed Interest Rates: Locking in a fixed rate can protect you from interest rate hikes.
  • Accessing Funds from Built-Up Equity: You can use the equity built up in your property to fund the purchase of additional properties, increasing your net worth and passive income.

Maximising Your Portfolio | Property Investment

Typically, investors grow their portfolio by paying down their mortgage or waiting for a property to appreciate before selling it to buy more. However, this method ties up your capital and subjects you to capital gains tax. Instead, refinancing allows you to leverage the increased value of your property to acquire additional investments without losing performing assets.

A Simple Illustration

  • Year 0: Buy Property A
    • Property Price: £1,000,000
    • Loan @ 70%: £700,000
    • Cash Investment: £300,000
    • Assume Price Growth 7% p.a.: £70,000
    • Price Growth 7% x 5 Years (35%): £350,000
  • Year 5: Refinance Property A and Buy Property B
    • New Property Price @ 35% growth: £1,350,000
    • Refinance @ 70%: £945,000
    • Pay Off Old Loan: £700,000
    • Cash in Hand: £245,000

Why Refinancing is Essential

By refinancing, you maintain your performing assets while using the cash-out to invest in more properties, continuously growing your capital and rental income. This approach allows you to multiply your portfolio significantly faster than the traditional method of selling and buying. Refinancing helps you optimise your investments and increase your wealth exponentially.

Should You Refinance?

Absolutely. Refinancing enables you to keep generating income from your current properties while expanding your portfolio. Red Cardinal Property Investments Buy, Hold, and Refinance Model is particularly effective in economically challenging times, ensuring you have a steady income and growth.

It’s crucial to choose the right investment properties and refinance with favourable terms. Red Cardinal Property Investment provides you with a comprehensive plan and support to navigate the refinancing process, ensuring you get the best terms and maximise your returns.

Let Red Cardinal Property Investment guide you in developing a refinancing strategy that enhances your investment portfolio and increases your passive income. Contact us today to start optimising your property investments for greater financial growth and stability.

Contact One of our team to find out more on how we can help you achieve your property Goals!

 

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